Wednesday, 9 November 2016

Updates on Positions

Asseco Central Europe

Asseco Poland is tendering for the remaining  6.49% shares of Asseco Central Europe, they do not currently own.
The tender offer price is 23.5 PLN.
This compares to a 52w high of 26 and a current bid of 23.8.
I see no reason to tender my shares at this price. The premium is not there. If Asseco Poland wants to delist the shares so be it, but they will still have cost to provide for minority shareholders. Better for them to pay more.

tender price23.5
52 weeks high 26
Dividend yield (%)9.4

The company still has more cash than debt. Although it is not as cheap as when bought around 16 PLN.

IMW Immobilien

IMW immobilien is tendering for its own shares at €7.50 per share. The company is still delisted, but share traded on the local Hamburg stock exchange for a short while around €7.50.
The offered price is too low. Their residential real estate in Berlin has increased in value, but this does not show up in the numbers. Book value per last report is €111 million using the conservative German HGB accounting, but economic value is higher. Remember the rents are at the low end of the spectrum and it is impossible to built new objects economically at such rates. This means the rents will increase sustainably for their kind of real estate. I sold all my shares above €9 before repurchasing. Fundamentals for their properties just kept improving and now comes this offer. I would be fine with many other shareholders accepting, so they can pay a real price next time for the rest and still make an unjustified killing for themselves in the future. After all it is dumb German money. So who knows how much shares will be tendered.

KWG Komunale Wohnen
The bok value per 3/31/2016 reached €10.95. I think this is the minimum one should get for the shares. operations are improving and costs are shrinking.

In April/2016 Conwert acquired 7.5% shares via their tender offer for €10.80 per share and reached 87% of shares.

In the meantime German DAX constituent Voniva expressed their intent to take-over Conwert.  Conwert shareholders are to receive 74 Vonovia shares per 149 Conwert shares.

conwert Immobilien Invest SEVIE:CWI16.2001.40%-1.38%15.98Vonovia SEETR:VNA32.170

With Vonovia's shares falling over the last month, the current ofer is €15.98 and the spread is negative (ignoring potential dividends).

When Vonovia acquires Conwert the more synergies to be of benefit to KWG. This will lower cost of debt via cash pooling. Banks are simply willing to lent larger sums at lower interest rates. I do not like this, but for now this are economies of scale for such capital intensive companies like real estate companies.

Hornbeck Offshore
My last blog post is from June. I just did not have the time and the blog did produce almost no feedback except spam comments. So I did not update. In the meantime I have sold my HOS shares for more than double the current price of around $8 at a loss. For now the equity is in distress. It is more like a call option on higher and stable oil prices, which would increase activity in the Gulf of Mexico. The publicly tradable bonds could be the fulcrum and trade at equity like yields. I may rather buy the debt here if at all. The company has Jones act vessels. Could even benefit from Trump.

I have some other positions in my portfolio. Please let me know if you are interested in me keeping to write posts.


  1. Please do keep posting, enjoy reading them

  2. enjoy your posts, please keep at it

  3. Replies
    1. Thanks AV. I really like your blog and also can play poker, which I taught myself to better understand statistics. Also was helpful for money management.

  4. Please update about CNL, ESSX, SNOW & SPIL

    1. Yair,
      will try to do. CNL is finished. ESSX does not release much new information. SNOW was sold for the blog, but unlike the GAIAM dutch tender the company did not look cheap to me at the time. Maybe I underestimated free cashflow for SNOW and overestimated maintenance capex. The sophisticated main shareholder did not tender their shares if I remember correctly. This was bullish. Price is higher now. So this was my mistake, but I would be no buyer at the current price.

  5. Yes, Asseco seems to be willing get Asseco CE cheap. Interesting thing however is that trades are done at 24 level, which might indicate possible increase in offer price - why else there would be constant accumulation at higher level? So lets see how it goes.

    Please do keep posting. Your blog was almost "dead", so not much to comment.

    p.s. you might look into Ericsson (Sweden), Silvano Fashion (Estonia), SAF Tehnika (Latvia), Passat (France) for possible ideas.

    1. Maybe the offer price for Asseco CE will never be increased. But in a squeeze-out the price could differ. I do not know the Polish laws to be honest, but in other countries like Germany the price could be challenged. My problem is I do not speak Polish, so I had to rely on secondary sources. Eastern Europe is cheaper than the more developed Europe markets or the more expensive USA, but there is still room for them to pay more imho.

      Thanks for the suggestions. I do not have access to the baltic stock exchange, but there are for sure interesting companies and I have been to all three countries.
      With Passat I do not know their products. Statisticaly the company looks cheap and I have bought other cheap French companies in the past like Installux, but I have to mainly rely on google translate. Small French companies tend to have more timely information only available in French.
      Ericsson raises the problem to value their patent portfolio, where I have no edge. It would most probably a waste of time for me to look at them, because I could never get comfortable enough to size big. At the moment I like Italian companies, because of the more down to earth prices. The Renzi vote does not scare me. I do not tend to act hyperactively on such things and can wait out the volatility, as I do not apply leverage.
      I will try to post more regularly.

    2. I have the same problem with Polish companies. While having some basic Polish skills, I feel am not able to grasp some topics even with generous help of Google. Overall Polish market is cheap, and have quite many companies for investigation. Another seemingly cheap one is Berling, engaged in air conditioning sale and service.

      You can read about Passat here (that is where I got the idea):

      Any Italian names you are considering?

    3. Especially the Polish companies not reporting in English look cheap. But difficult to spot the caveat there without better language skills.

      Thanks. I am already a subsriber of the wertart blog.

      I wanted to write about Astaldi, but there was a recent price increase. I like Telecom Italia saving shares and Mutuionline.

  6. Checked those Italian names. Astaldi seems to be cheap on the surface, but with all those construction companies there is a lot of hidden risk. Not sure... Mutuionline seems to be really interesting, thanks.

    1. Astaldi's cost of capital is a bit difficult to pinpoint. It is not just an Italian construction company, but has business in jurisdictions like Russia or Turkey. For example given Russian companies are very cheap, the Russian part of the Ebit is worth less than Ebit from USA. Also are receivables and WIP really worth book? But it is cheap enough for me.

      Mutuonline is better quality and has good capital efficiency. Their growth is valuable. I would love to buy cheaper.